Corporate venture capital and the nature of innovation

Arbeitspapier

This paper investigates a model where two corporate venture capital firms (CVCs) decide whether to finance a new venture stand-alone or together, called syndication. The CVCs obtain a cash flow if the venture succeeds. In addition, the venture has a positive or negative effect on an asset of the CVCs parental companies. This effect may differ among the parental companies. I show that the CVC faced with the weaker positive effect becomes the stand-alone investor only if the expected cash flow is low. Otherwise, in equilibrium, there are only syndicates or stand-alone investments of the CVC with the stronger positive effect. However, if one CVC faces a positive effect on its parental company's asset whereby the opponent faces a negative effect, then a syndicate is still possible. The model generates empirical predictions for syndicates consisting of several CVCs.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Hannover Economic Papers (HEP) ; No. 603

Classification and Topics

• Classification: Wirtschaft ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies ; New Firms; Startups
• Subject: Corporate Venture Capital ; Venture Capital ; Nonmonetary Support ; Nature of Innovation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Maxin, Hannes
• Event: Veröffentlichung
• (who): Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät
• (where): Hannover
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/172857
• Last update: 10.03.2025, 11:44 AM CET